ObamaCare (ACA) Repeal and Replacement via American Health Care Act (AHCA) ON HOLD for 2017 and 2018

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[Latest Update] The repeal and replacement of Obamacare via the American Health Care Act, the Ryan-Trump administration proposal, is officially on hold following a lack on unity across the Republican party to get the AHCA bill approved in the House. With no Democrat member support, it had to be passed by all the factions of the Republican party to clear the house and to the Senate. However due to the various subsidies and tax credits in the AHCA bill, the ultra right wing members (House Freedom Caucus) did not provide the required support.


For now Speaker Ryan has said the AHCA bill is on ice and won’t be resurrected until later this year when it can be rewritten and garner more support. Trump instead is looking to focus on his tax reform plan in the year head.

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The house GOP has announced their proposed first phase repeal and replacement of ObamaCare. They are calling this bill the American Health Care Act. It has the following features.

  • Expanded tax credits and health savings accounts (HSA) for individuals. For those under 30, a $2,000 tax credit will be provide, while a person over 60 would be eligible for a $4,000 credit. The maximum credit for a family would be $14,000 annually. These refundable tax credits are subject to annual income limits ($75,000 for individuals and $150,000 for married couples)
  • Reduced federal spending on tax subsidies and Medicaid. Medicaid expansion will only continue until Jan. 1, 2020, with enrollment and federal funding diminishing after that date
  • Eliminating the employer and individual mandate (Obamacare penalty) to provide and carry health insurance. This has been the biggest issue for most republicans and voters, who feel it is just another government imposed tax. However the bill does state that their could be a 30% premium surcharge for those uninsured for more than 63 days
  • High income earners medicare tax with AGI of over $200,000 ($250,000 married filers) face an extra tax of 0.9 percent  This is in addition to an investment surcharge of 3.8 percent on income. Both these taxes will be eliminated under the AHCA.
  • Creation of state-based high-risk pools for people who don’t have access to insurance. This would initially be federally funded with $15 billion annually, but will drop to $10 billion from 2020
  • Two popular ACA provisions will stay in place. This includes the provision which allows children under the age of 26 to stay on their parents’ health plans and the inability of insurers to deny coverage or charge more for people with pre-existing medical conditions
  • 5:1 rule vs 3:1. Under new health care laws insurance providers will be able to charge older customers up to five times more than younger customers. This is to line up with the higher cost of coverage for older Americans, but is nearly twice the multiple allowed under Obamacare
  • The bill will repeal all funding related to public health concerns (under the Prevention and Public Health Fund) like Alzheimer’s research, diabetes prevention, heart disease prevention, anti-smoking initiatives and immunization. While this is needed to pay for the bill it will make a lot of special interest and impacted groups (mainly democratic) very unhappy.

The ACHA or TrumpCare bill will be reviewed over the next several weeks and it is expected to go through a lot of revisions as a number of Republicans (and virtually all Democrats) have already expressed reservations around these changes and coverage impacts for the 20 million Americans currently on Obamacare.

How will people be impacted if Obamacare (ACA) is repealed?


Based on the current provisions, the current plan to repeal the Affordable Care Act will probably benefit the rich and young the most. This is because a number of taxes – e.g the 0.9% high income and 3.8% investment tax – are being eliminated. This will save higher income earners billions in lower taxes. The Tax Policy Center estimates the average household from the top 0.1 percent of income distribution would save $31,000 a year if the tax on high salaries were repealed, and another $165,000 each year without the tax on investments.

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[Update Jan 2017] – A Obamacare repeal and replacement may be more politically challenged than thought with a new Wall Street Journal/NBC News poll finds that 45% of Americans think the 2012 health law is a “good idea,’’ the highest mark since pollsters began asking about President Barack Obama’s vision for a health overhaul in April, 2009. The republican dysfunction over coming up with a viable replacement to Obamacare is also creating unease as reflected by some 50% of polled adults saying they had “very little confidence” or “no confidence at all” that Republicans could replace the health care law with a law that would make things better. That was greater than the 26% of people who said they had “quite a bit” or “a great deal of confidence” in that idea and the 23% who said they had “just some” confidence.

Will keep updating with any pertinent information, but feel free to share your comments below and check back in for the latest updates.

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With Trump’s surprising win in the US presidential election and the Republicans retaining control of the House and Senate, it looks like ObamaCare’s viability is at serious risk. ObamaCare, officially known as the Affordable Care Act (ACA), has been long maligned by Trump and Republicans and the promise was that it would be repealed on day one of a new Republican presidency. But with over 20 million Americans on ObamaCare, repealing it without providing a replacement would be a politically unwise move, despite the ongoing complaints of increasing premiums and fines. Various other provisions under ACA laws like including covering those with pre-existing health conditions, free birth control and extended coverage for young adults under family health insurance plans, are very popular and not as easy to unwind.

Leave your comments and thoughts below on where you think debate on this topic will go and your views on it.

{ 9 comments… read them below or add one }

Jeannette February 25

It’s just sad that taxpayers would be taxed if they don’t have insurance. Alot of people work paycheck to paycheck and so many people getting unemployed. It just stinks – it should of been whoever wanted to buy into health insurance then they should buy it, it shouldn’t of been mandatory. Some people go into walk in clinic because sometimes in comes out cheaper and you pay what they charge. It stinks when your paying for health insurance and you don’t even us it, will they pay you a percentage back if you don’t use it, NOPE……

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No one important January 21

No one should have to be penalized for not wanting to pay for something. Health insurance was supposed to be a necessity not a luxury. $5000 a year may not be a lot to most people but to me it is. I’m lucky to have a full time job that offers Humana, because if I didn’t, I would be screwed.

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Judi December 30

I quit my corporate life sucking job and my husband owns a small business. Our premiums would be $750/mo in 2017 and that is with the highest deductible and virtually what we used to call “hospitalization” insurance. We can’t afford it and are at risk but there are NO alternatives! Can’t wait for it to be repealed!

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Patt December 21

ACA, so far, has only applied to self insured like me.
My insurance was canceled and I applied again.
It jumped from 262/ month to 911/ month. I can’t
afford insurance now.
BTW, the uninsured had insurance. It`s called Medicaid.
The Liberal Media don’t know or don’t care.

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James W Zielinski December 12

I don’t use medical doctors. I don’t take drugs. I use all of my innards and would like to keep them. My total medical costs aggregated over my lifetime come to less than $500.00. Because I live correctly and take of myself correctly. Why can’t I have an option to only purchase catastrophic only insurance instead of paying more in premiums every month than I have spent in my whole life in order to not get coverage anyways because I will never spend enough to breech my deductable? It seems like spending money on nothing is a lot like throwing money away. I don’t believe in the current Allopathic medical model and I don’t use it. Thank You. Please advise me on any alternatives I have to flushing money into private companies under government mandate for services which I do not desire or require.

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Lisa November 9

Prior to Obamacare, my family was able to buy insurance through our employer for dependents (premium never went above $456 per month whether you had one child or several) and the employer always paid the employees portion – since ObamaCare, the employer only pays half the employees and the dependent coverage is $400 twice a month (for one child or 20); now with that said, the deductible is $5k per person on the policy with a maximum of $15k per family – now if everyone is traveling in a vehicle and there is a drunk driver that hits and runs and catastrophically injures everyone in the vehicle, prior to treatment – head of household (me) would have to fork over $15k – of course the hospital will bill you and repair you at a minimum state, discharge you and suggest you visit your PCP – well those costs are separate from the other costs and those deductibles are another $6k for a family of 3; then of course there’s medication and physical therapy and various deductions for everything

That’s $21,000 out of pocket before insurance kicks in.

So now your family budget has taken a hit of $21,000 and your income is $50,000 pre tax dollars – Guess What – who cares if there is ObamaCare, it doesn’t insure the working class, only the upper class and lower class. Why would I care if all those people live without insurance and pay the penalty?

The annual premium for 3 is $14,400 – if you take the reduced rate, pay your taxes, you have nothing still-you don’t get your refund, cause you took the reduced rate which only saved you $3,600 annually. (Don’t forget-you still have to pay your regular taxes and medicare taxes and social security taxes too, before you can see what you will have left for grocery monies.)

On the other hand, if you don’t buy insurance, say your prayers, you annual tax penalty for an income of $50k is either $2,285 or 2.5% of income (est.) with a maximum of $13,500 (est.) –

50,000 x 2.5% = $1,250 tax penalty (it is unclear is this is a flat percentage based tax or not, IRS will let us know when they come a calling)

Now if you go to the local clinic, your out of pocket is $50 per visit or less – x3 visits on average per year, that’s $150 per person for a gross total of $450 for a family of 3 (head of household and 2 dependents). Add that to the

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Donna December 1

Lisa,

First of all I definitely hear your distress with raising rates and reducing benefits. We’ve been seeing a dramatic increase in rates that don’t match income for the last 20 years in the insurance industry. Keep in mind also that, as much as we’d like to blame Obama for all of this, or his plan, the increase has actually slowed and we aren’t talking about that. 1996-2002= 78% increase; 2002- 2008 = 58% increase; 2008 – 2012 = 33% increase. Each time industry wide plan design changes came about to offset costs (like the HRA), so I’m not crediting Obama, just stating facts that we don’t usually discuss. I have no horse in this race, politically speaking. Personally I feel we’re approaching this backwards.
I can’t see your plan history, so I am making assumptions based on my experiences with my own clients. Obamacare (PPACA) doesn’t insure the upper class though, at least regularly not. There are cases where someone like Christopher Reeve, who was a millionaire but ran out of benefits after his catastrophic injury, due to lifetime limits. Those are the one-offs though.. It does provide insurance, to the working class, whatever their income level, though most I’ve seen are lower-middle class to lower class. At 400% of the poverty level (FPL is $11,770 annual income) you can receive the smallest subsidy, and it goes up from there.
The biggest reason I’ve seen employer costs rise on an aggregate level, and them having to pass that along to employees on an individual level, is that they now have to cover a much larger pool of employees and/or are pushed into a rating market that calculates their insurance differently. To say that more simply, your insurer might have only had to insure 25 people before where they now have to insure 60, but are still making the same amount of money from the same work done by that employee base. New rules now say they need to insure more people. How to try and mitigate this cost? You buy a much less rich plan since you are covering so many more people. It’s like having twice as many kids. Everyone eats rice. No more steak (or even chicken). At the same time there are requirements like no pre-existing conditions or no lifetime limits that now have to be in place nationally. So while those previously with insurance are saying their insurance has gotten worse or more expensive, many are saying they’ve never had any insurance before. In that, it is all about where you were before the law went into effect.
Again, I’m not advocating PPACA. The administration has been a mess, and I think those who created were well meaning, but don’t understand the actual issue. ‘ACA’ stands for Affordable Care Act. This plan never discusses the Affordability of Care. I think that is the basic flaw inherit in the system. They took a broken system and added more people, and that made things much worse. People like you and your family felt this immediately. Imagine, if you would, going to the grocery store, the one to which you are directed by your assigned grocer, and buying groceries that are on your list that your grocer gives you to buy. Nothing is priced and you can’t find out the cost when you check out. You’ll find out how much it costs in a few weeks. That is how we currently buy our insurance services, when we get lab work, or an MRI. Our PCP, who works for a hospital system sends us tot he more expensive hospital system and we can’t find out where less expensive care is. Insurance carriers contract from the top down and negotiate a reduced cost. Only Medicare starts at the bottom and sets a level cost. I’m not saying Medicare for all, but I am saying we need price transparency. We need it state/federally mandated that medical organizations release the true cost of their care and how much they charge. They we can “Amazon shop” for it. We can’t fix the premium costs of insurance, because they are driven by the claims, and the claims will keep rising so long as we don’t know how much they are. Obamacare is broken because it doesn’t address the problem, but neither does any “solution” the RNC has put out. It’s almost like the government has no idea how healthcare works…or lobbyists exists…hmmm.

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Patt December 21

Donna,
Remember:
If you like your doctor, you keep your doctor.
If you like your plan, you keep your plan.
Everyones plan will go down $2,500/ year?
ACA has only applied to
self insured, not employer sponsored insurance, ,
Yet.
I can’t afford insurance, and I’m called a racist
when tell others about it.

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Wen January 9

Someone has to pay for the welfare system they sure don’t eat rice

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